Crowdfunding: Is it Right for You?

The Internet has done many things for society. In addition to allowing us to see cute pet videos and friends and families taking on the ALS Ice Bucket Challenge it has also brought strangers from across the globe together is a large, virtual social gathering. We share opinions, photos, videos, various links of importance or inanity and, in some circumstances, money. In many cases this is done in the form of crowdfunding.

Crowdfunding has been around a few years and has become a source of raising money for various projects, be it recording of a debut album, resurrecting a loved show like Reading Rainbow or making potato salad. Kickstarter has become the go-to source for these types of projects; however, others like Pubslush and Indiegogo have popped up over the last few years to provide competition. Many individuals and startup companies have been able to fully fund their projects. However, not everyone is successful in reaching their goals.

As someone who is interested in starting up a business in order to spend more time with your young family the question is whether or not starting a crowdfunding campaign is right for you. Here are a few questions you need to answer before making that decision.

What is your project? Is it something to be viewed or purchased by those who donate to your crowdfunding campaign? In other words, is it something like a book, record or other artistic item or something more abstract?

What are the rewards? Most crowdfunding campaigns offer a reward system when someone contributes a certain amount of money. Think of public television or radio pledge drive that merits a donor a t-shirt or DVD set for donating. Regardless if the campaign is for a physical or abstract project, consideration needs to be made on what you can give the individual.

How much do you want? Rather, how much do you need to fulfill your request? This requires a budgeting plan in order to determine how the funds should be distributed. You can certainly try to raise tens of thousands of dollars, but the chances of being fully funded are smaller in that case unless you are a known entity. Smaller fundraising campaigns with a detailed description of where the costs go to may help goals reach fruition.

Where should you go? Kickstarter is the place many people and organizations head toward to start their campaigns, but there are others out in the Web which cater to individualized professions. For example, Pubslush is for those looking to fund their new books while Indiegogo focuses on creative projects. The site appbackr is for those who are looking to fund the construction of a new phone app and AngelList is for start-ups looking for an infusion of cash. Think carefully before deciding on a site.